REG - Tern PLC - Partial sale of Device Authority holding

TernAnnouncement

09/08/2024 07:00

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RNS Number : 8050Z  Tern PLC  09 August 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.

9 August 2024

Tern Plc

("Tern" or the "Company")

Partial sale of Device Authority holding

Tern Plc (AIM:TERN), the investment company specialising in supporting high
growth, early-stage, disruptive Internet of Things ("IoT") technology
businesses, announces that it has sold part of its shareholding in Device
Authority Limited ("Device Authority") for a total cash consideration of
£233,000. As a consequence, Tern's holding in Device Authority has reduced
from 31.7% to 30.0% (before any dilution on the exercise of share options and
the expected closing of Tranche Two ("Tranche Two") of the Device Authority
Fundraising announced on 27 December 2023).

This sale of equity in Device Authority equated to approximately 5.3% of
Tern's holding in Device Authority and has been undertaken at the same price
as the Device Authority Fundraising announced by the Company on 27 December
2023 (the "Device Authority Fundraising Issue Price"). The buyer of Tern's
equity in Device Authority is an independent family office who are not
currently a shareholder in Device Authority and not related to Tern. The
proceeds of this disposal will be used to invest further in one or more of
Tern's portfolio companies and for general corporate purposes.

Tern's reduced holding of 30.0% in Device Authority (before any dilution on
exercise of share options and the expected closing of Tranche Two) has an
unaudited book valuation of approximately US$5.4 million (approximately £4.2
million) at the valuation implied by the Device Authority Fundraising Issue
Price.

The remaining Tranche Two of the Device Authority Fundraising of US$3.3
million, by Ten Eleven Ventures remains, as previously announced, to be
completed on or prior to 30 September 2024. On completion of Tranche Two, by
Ten Eleven Ventures, Tern will hold 25.3% of Device Authority's equity (before
any dilution on exercise of share options), which would be valued at
approximately US$5.4 million (approximately £4.2 million) at the valuation
implied by the Device Authority Fundraising Issue Price.

Unless otherwise stated, defined terms should be given the meaning given to
them in the Company's announcement made on 27 December 2023.

Commenting Ian Ritchie, Chairman of Tern, said: "Following the failure to pass
the resolution required to issue new ordinary shares disapplying statutory
pre-emption rights at the recent Annual General Meeting, the Tern board has
been investigating ways to appropriately raise funds to protect Tern's
position in, and progress, Tern's portfolio companies, whilst also providing
Tern with funding as an AIM company. The sale of a modest proportion of our
holding in Device Authority, at no discount to the value that Device Authority
raised funds in December 2023, is, I believe, appropriate to meet the
Company's immediate requirements. We will continue to explore the best way to
maximise shareholder value and I look forward to providing updates on our
portfolio companies in due course."

Further information on Device Authority

Device Authority is a global leader in Identity and Access Management ("IAM")
for the IoT; focused on the automotive, medical device ("IoMT") and industrial
("IIoT") sectors. Device Authority's KeyScaler™ platform provides zero touch
provisioning and complete automated lifecycle management for securing IoT
devices and data at scale, with frictionless deployment across device
provisioning, authentication, credential management, policy based end-to-end
data security/encryption and secure OTA (over the air) and HSM (hardware
security module) updates.

Based on Device Authority's latest statutory accounts for the year ended 31
December 2023, as at that date it had net assets of £11,024,568 and incurred
a profit for the year of £4,303,751. Given the statutory nature of these
figures Tern does not consider this profit to be representative of the
current business and trading performance of Device Authority.

Enquiries
 
 Tern Plc                                                       via IFC Advisory

 Ian Ritchie (Chairman)

 Allenby Capital Limited                                        Tel: 0203 328 5656

 (Nominated Adviser and Broker)

 Alex Brearley / Dan Dearden-Williams (Corporate Finance)

 Kelly Gardiner / Guy McDougall (Sales and Corporate Broking)

 IFC Advisory                                                   Tel: 0203 934 6630

 (Financial PR and IR)

 Tim Metcalfe

 Graham Herring

 Florence Chandler

 

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